White Collar Crime Prof Blog

In the News and Around the Blogosphere

Colin Perkel, The Canadian Press, Chances of President Bush granting leniency to Conrad Black called infinitesimal

Doug Berman, Sentencing Law & Policy, Through the federal clemency looking glass with Holder

DOJ Press Release, Mississippi Lawyer Pleads Guilty for Failing to File Tax Returns on Income Exceeding $2.5 Million

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In the News and Around the Blogosphere

Carl Hulse, NYTimes, Democrats Gain as Stevens Loses Race

DOJ Press Release, Miami Physicians Sentenced to Prison for Their Roles in a $6.8 Million Medicare Fraud Scheme  (one received 37 months and the other 48 months) 

DOJ Press Release, Former Congressional Legislative Assistant Pleads Guilty to Failing to Report Thousands of Dollars in Illegal Gifts from Lobbyists

DOJ Press Release, I.R.S. Revenue Agent Arrested After being Indicted on Charges of Tax fraud and Obstructing an Investigation

Karen Sloan, National Law Journal, Former U.S. prosecutor lands at King & Spalding

Sue Reisinger, Corporate Counsel, Mission Critical -The British government dropped a bribery probe of BAE, but U.S. prosecutors picked it up. In the meantime, BAE's GC cleaned up its act-enough to fend off an indictment?

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More on the Ben Kuehne Case

Dan Slater has a wonderful piece on the importance of the Sixth Amendment's Right to Counsel and the implications to this right when the government proceeds criminally against legal counsel. See Dan Slater, Wall St Jrl, Scales of Justice: The Right to Counsel vs. the Need to Bar Tainted Legal Fees  The article speaks directly to the Ben Kuehne case.  For background see here and here. But I have to wonder about a statement at the end of the article that seems to imply that cases to PDs aren't increasing, so therefore lawyers aren't being skeptical about taking these cases. Could it perhaps be that there hasn't been an increase of drug cases to the PD's office because there has been such a strong focus by the FBI on terrorism and immigration, and a movement away from drug cases? Drug cases have declined and no longer hold the top priority that they did in past years. TRAC notes here in a September 2008 report:

"Ranked 3^rd was "Drug Abuse Prevention + Control-Prohibited acts A" under Title 21 U.S.C Section 841. Title 21 U.S.C Section 841 was ranked 2^nd a year ago, while it was the 1^st most frequently invoked five years ago. It was ranked 1^st ten years ago and 1^st twenty years ago."

So perhaps lawyers are really being deterred from taking these cases, and the fact that PDs are not seeing a decrease in cases in their office is an indication of just that.

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AG Holder?

Everyone appears to be dropping Eric Holder's name as the likely next Attorney General. See Ashby Jones, WSJ Blog, Report: Obama ‘Deeply Interested’ in Eric Holder as AG; LA Times, Looks like Eric Holder, ex-Clinton acting AG, will be Obama's AG

Some appear to be focused on what role he may have played in the Marc Rich pardon (see here).  But this focus is misplaced as the President has the power to pardon and there have been a lot more controversial pardons in the history of the U.S. (see William Jefferson Clinton, NYTimes, My Reasons for the Pardons). (I am still waiting to see President Bush's pardons -particularly as to whether Barney will be included - see here). 

Further if Holder was "neutral, leaning for" the pardon, as stated by former President Clinton, than perhaps he was in part following the DOJ guidelines that advise against using tax offenses with a RICO charge (see here). (This Indictment included a RICO charge). RICO excludes tax predicates (see here), so using other predicates to enhance a tax case to bring it to a level of a RICO was just plain wrong, and one should credit Holder if it turns out that his hesitation was for this reason. (see here)

But what needs to be asked is where Eric Holder stands today on the "Holder Memo." It's a memo that went through many changes after it left his desk. (e.g., Thompson Memo, McNulty Memo, Filip Memo).  The key question that needs to be asked now is where he stands on the attorney-client privilege and will he respect it. It also would be good to see if he will meet the wish list provided here.

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Prosecutorial Power - Indicts VP

Prosecutors have enormous power.  They can pick and chose who to indict and for what crimes. The saying goes that a prosecutor can get a grand jury to indict a ham sandwich if the prosecutor wants that (see here for history of this phrase) -although some may claim otherwise. The prosecutorial discretion that comes with the charging power is often criticized, but prosecutors often contend that it is necessary for them to have such discretion.

The use of prosecutorial discretion is likely to be something that is examined in a Texas County of approximately 20,500 people (see here) as it looks like charges may be brought against one very high level official, and another who used to be in a top position.  See CNN, Texas Grand Jury Indicts Cheney, Gonzales; Huffington Post (AP),Cheney, Gonzales Indicted By South Texas Grand Jury; Christopher Sherman, Houston Chronicle (AP), Dick Cheney, Alberto Gonzales indicted in S. Texas -Charges related to alleged abuse of prisoners in federal detention centers; Dallas Business Journal, Grand jury indicts Cheney, former AG

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In the News and Around the Blogosphere

Chronicle of Higher Education, Cuomo Is Investigating College Ties to Student-Health Insurers

DOJ Press Release, D.C. Court of Appeals Clears Way for $200 Million Restitution Order in Tax Fraud Conviction

Chad Brey, CNN Money (Dow Jones), Lawyer Indicted In Tax-Shelter Fraud Scheme

Dan Slater, WSJ Blog, At Long Last, Enron Shareholders Set to Cash Out (w/ a hat tip to Bill Olis)

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In the News and Around the Blogosphere

Margy Love, Washington Post (Op-Ed), In Defense of Lame-Duck Pardons

DOJ Press Release, Two Charged with Illegal Trading with Iran

DOJ Press Release, Virginia Physicist Pleads Guilty to Illegally Exporting Space Launch Data to China and Offering Bribes to Chinese Officials

Mike Scacella, BLT Blog, Sentencing Guidelines Disputed in D.C. Circuit Tax Fraud Case

DOJ Press Release, California Executive Agrees to Plead Guilty to Bid Rigging on Contracts with the U.S. Navy and Others

Amir Efrati, WSJ Blog, NJ USA Christie Resigns, SDNY’s Garcia to Announce Resignation Today

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SEC Complaint Against Owner of the Dallas Mavericks

An SEC press release reports that "[t]he Securities and Exchange Commission today charged Dallas entrepreneur Mark Cuban with insider trading for [allegedly] selling 600,000 shares of the stock of an Internet search engine company on the basis of material, non-public information concerning an impending stock offering."

Use of the word charge may leave the wrong impression. This is not a criminal matter, but rather a civil complaint. The complaint can be found here.

The SEC Litigation Release states in part:

"The Commission's complaint alleges that Cuban violated the antifraud provisions of the federal securities laws by engaging in illegal insider trading in the securities of Mamma.com Inc. ("Mamma.com"), a publicly traded Internet search engine company (now known as Copernic Inc.) based in Montreal, Canada. According to the complaint, in June 2004, Cuban sold his entire 600,000 share position in Mamma.com on the basis of material, non-public information concerning an impending PIPE (private investment in public equity) offering by the company. The complaint alleges that Cuban avoided losses in excess of $750,000 by selling his stock prior to the public announcement of the PIPE offering."

Mark Cuban, owner of the Dallas Mavericks' blog is located here.  You'll find that his lawyer is Ralph C. Ferrara of Dewey & LaBoeuf (DC) and that his lawyer is not letting him say much - one quote  -clearly a good move.  But it looks like this matter has been going on for awhile and the lawyer states "Mr. Cuban intends to contest the allegations and to demonstrate that the Commission’s claims are infected by the misconduct of the staff of its Enforcement Division." More is stated here. This is clearly a case to follow.

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Addendum - Liz Moyer & Andrew Farrell, Forbes Magazine, SEC Guns For Billionaire Mark Cuban

NYTimes, Dealbook, S.E.C. Accuses Mark Cuban of Insider Trading

In the News and Around the Blogosphere

Mike Scarcella, BLT Blog, Judge Rules Against White House in E-mail Dispute

Jon Swartz, USA Today, Hackers, phishers can't get away with it like they used to

Stirling Newberry, Firedoglake, Who is Neil Barofsky, And Can We Trust Him to Watch the 700 Billion Collar Cookie Jar?

Matthew Barakat, Houston Chronicle (AP), Ex-Tech billionaire gets 9 years for stock fraud

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Should Barney, A Repeat Offender, Receive A Pardon?

Unlike most white collar cases that have individuals who have no prior convictions, reports are that Barney the white house canine is a repeat offender. See Rodrique Ngowi,TBO (AP), Reporter wasn't White House dog's 1st bite victim. And it seems that the victims have a commonality (all press people). 

It was questioned here whether Barney would appear on the President's outgoing pardon list. Most pardon grants are first offenders, and often their convictions are very old.  Who will receive President Bush's outgoing pardons remains to be seen.  Mind you, I don't have a dog in this fight.

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The Ben Kuehne Case

In my wish list to Obama and his next AG, I ask them to "re-examine the Ben Kuehne case."  It is hard to imagine that a re-examination with fresh eyes would come to the same result.  (See background here)

Normally when someone is indicted, the surrounding friends slowly disappear - they distance themselves from the accused.  The fact that the opposite is happening in the Ben Kuehne case is another indication that something just isn't right here.

Check out  - David Oscar Markus, Ben Kuehne -This email invitation is making the rounds. Should be quite an event; Julie Kay, National L J., Miami's defense community rallies for indicted — and cash-strapped — attorney

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